Private-equity upstart raises $50 million with big backers

NextGen Growth Partners, an upstart Chicago private-equity firm with prominent investors, has raised about $50 million for its first investment fund, the firm said in a statement.

The firm, founded by former Innflux co-CEO Brian O'Connor in 2016, will use the money to invest in lower-middle-market business services companies, and expand them with leadership from the firm's "entrepreneurs in residence." For those roles, it's tapping alumni of the University of Chicago's Booth School of Business and Northwestern University's Kellogg School of Management, among others, to be CEOs of the companies.

O'Connor, 37, is himself a graduate of Booth and has taught as an adjunct assistant professor of entrepreneurship at the school. Innflux, a Chicago hospitality IT company where he formerly oversaw sales and marketing, was sold in 2015 to Thing5. O'Connor also previously worked for Chicago billionaire Sam Zell's real estate investment companies Equity International and Equity Office Properties Trust.

NextGen made its first investment last year in Manhasset, N.Y.-based MHW, a company that provides compliance, import and distribution services to alcohol producers. NextGen, which has nine employees, plans to invest between $5 million to $20 million in each target, O'Connor says.